USMCA Could Be Good News For Arizona Consumers, Manufacturers

By Katherine Davis-Young, Murphy Woodhouse, Rodrigo Cervantes, Lauren Gilger, Mark Brodie
Published: Wednesday, December 11, 2019 - 6:05am
Updated: Wednesday, December 11, 2019 - 12:44pm

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House Democrats and the White House have reached a deal to bring the U.S.- Mexico-Canada Agreement one step closer to reality, pending final approval from all three countries. Proponents expect the new international trade deal to benefit Arizona industries from tourism, to agriculture, to manufacturing.

Arizona consumers could see better quality and prices on imports like tomatoes and avocados as a result of USMCA. But Glenn Hamer, president and CEO of the Arizona Chamber of Commerce and Industry, said the deal will also impact prices on goods like cars or semiconductors-where manufacturers might have plants on both sides of the U.S.-Mexico border.

“What USMCA is going to do is cement those supply chains and allow our modern manufacturing sector to grow even faster than it would have otherwise," Hamer said. 

The new deal is an update of the North American Free Trade Agreement, which was 25 years old. Hamer said NAFTA didn’t account for advances in e-commerce, or technology, like the growth in high-tech car manufacturing in Arizona.

Nearly 230,000 Arizona jobs rely on trade with Mexico and Canada.

Hope For More Investment

Jesús Seade and Marcelo Ebrard
Rodrigo Cervantes/KJZZ
Jesús Seade, Mexican foreign affairs undersecretary, and Marcelo Ebrard, secretary, in Mexico City.

On Tuesday, applause broke out in Mexico City as the chief negotiators of the USMCA — Canada’s Chrystia Freeland, Mexico’s Jesus Seade, and Robert Lighthizer of the U.S. — signed the updated agreement.

Revisions included stricter monitoring of labor provisions, stronger environmental regulations and changes to pharmaceutical patent rules. Democrats in the U.S. House of Representatives described the changes as a good deal for workers, patients and the environment.

Seade, Mexico's undersecretary of foreign affairs, explained that the border area will be bolstered by loans and credits from NADBank (North America Development Bank), which was created for NAFTA, the former free trade agreement.

He says another benefit for the border will be the elimination of seasonal tariffs that affected agricultural trade. And conflict resolutions under the USMCA will not be dominated by Washington, but solved by trilateral committees.

During the signing ceremony, Mexican President Andres Manuel Lopez Obrador described the agreement as “good for the three people, the three nations and three governments.”

It still needs to be ratified by all three governments.

“Without doubt this means greater investment for Canada, the United States and Mexico,” AMLO, as the president is known, went on to say. “It’s about attracting more investment for North America, this region.”

The step forward was also welcome news for Jaime Chamberlain, board chairman of the port authority in the Arizona border city of Nogales. Billions of dollars of agricultural and manufactured goods cross back and forth there every year.

“As you can tell by a lot of the different comments from any businessmen in any of the three countries, we’re extremely pleased with the agreement,” he said.

Chamberlain, who is also in the Mexican produce import industry, said the new agreement brings much needed certainty to that multibillion-dollar cross-border business. It’s the largest source of private employment in Nogales.

“We’re planning two, three, four, five years in advance, with what we’re going to be doing on our farms … ,” he added. “And when you don’t have an agreement in place between your countries, it is very, very difficult to think about making those investments.”  

Now with a new deal likely, he said Mexican produce growers and importers are feeling much more comfortable making those long-term commitments.

Impact In Arizona

The updated free trade agreement contains several new provisions that will impact Arizona. Sapna Gupta, a regional economic development analyst with the Maricopa Association of Governments, joined The Show to talk about it. 

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